Hurd rides to the rescue

By -
The Washington Times -
Thursday, September 14, 2006

SAN FRANCISCO — After replacing Carleton Fiorina as Hewlett-Packard’s chief executive nearly 18 months ago, Mark Hurd quickly cobbled together a successful comeback from the jumbled pieces left behind by one of corporate America’s most powerful women.

Now HP is counting on the no-nonsense CEO to clean up a new mess as he prepares to follow another high-profile woman as chairman of the company’s dysfunctional board of directors.

Industry analysts say Mr. Hurd’s track record as CEO and straight-shooting style make him the logical pick to replace HP Chairwoman Patricia Dunn in January as the company copes with the backlash from its investigators’ privacy breaches while trying to plug a media leak.

“This is a very elegant solution to a tricky situation,” said technology industry analyst Cindy Shaw, a former HP employee.

Investors seemed to agree as HP’s shares reached a 52-week high of $37.25 on Tuesday, the day Ms. Dunn announced her resignation. HP shares slipped 12 cents yesterday to close at $36.25 on the New York Stock Exchange.

HP’s market value has soared by nearly 70 percent, or $38 billion, since it lured Mr. Hurd away from NCR Corp., a Dayton, Ohio, computer services company best known for making automated teller machines.

Mr. Hurd, 49, arrived at HP as the antithesis to Mrs. Fiorina, whose flamboyance helped make her one of the country’s most visible CEOs.

While Mrs. Fiorina always savored the spotlight, Mr. Hurd has shunned it. He also seems more approachable than the sometimes abrasive Mrs. Fiorina, with his collegial style that helped raise morale among HP’s staff, even though the company is in the process of laying off 15,000 employees.

“He is very personable,” said Roger Kay, who follows HP as president of Endpoint Technologies Associates, a market research company. “Even when he is delivering a hard message, he can use affable humor to soften it.”

Most important for HP, Mr. Hurd has lifted one of Silicon Valley’s best-known companies out of a prolonged funk.

Analysts give Mrs. Fiorina some of the credit for overcoming a boardroom revolt to buy Compaq Computer Corp. for $19 billion in 2002. But that deal never paid off until Mr. Hurd arrived to cut costs, trim bureaucracy and redefine workers’ priorities.

“Mark has brought more clarity and simplicity in speaking and thinking about the company,” said Forrester Research analyst Frank Gillett. “That has helped HP, both internally and externally.”

That progress is reflected on HP’s bottom line. Through the first nine months of its current fiscal year, HP earned $4.5 billion, more than doubling from the same period the previous year.

“Mark has improved the company’s execution more than I thought was possible,” Ms. Shaw said. “HP’s employees have gone from feeling like losers to feeling like winners in less than two years.”

Mr. Hurd will face a different challenge as chairman of a board immersed in a legal morass.